First, the company makes a passel of low-budget horror and thriller films
(like the Saw series) on the cheap, then pulls out all the stops for
its major franchises like the Hunger Games trilogy. (Hunger Games:
Catching Fire is due out in just a few months).

The second strategy is co-production of TV shows with other studios and
networks. The big title right now is Orange is the New Black, which is
the latest streaming-only series from Netflix.

The company also co-produces Mad Men with AMC Networks,
Nashville with Walt Disney and ABC, Anger Management with FX
and 21st Century Fox, and Nurse Jackie with Showtime.

All of these shows provide steady income, augmenting the rental revenue flow
from the company's extensive library of films and TV shows.

With Hunger Games: Catching Fire on the horizon, investors are
signing on to get a piece of the pie.

The company's revenue growth, which was 0% in 2012, and generally in single
digits for many years, hit 71% in 2013, an eye-catching turnaround that has
continued this year; Q1 revenue growth was 22% and Q2 was 21%.

Technically, LGF
graduated out of single digit prices in early 2012, busting past $10 in January
and hitting $14 in February. The stock consolidated for many months, and was
trading at $16 when it began another big move in December 2012.

LGF
has doubled to more than $32 in 2013, and has spent the last five weeks trading,
first under resistance at $33, and now over support at $33. The rising 25-day
moving average has just caught up with the stock, which may provide some lift.

We think LGF
looks like a reasonable buy (P/E is just 15) on any weakness. Volatility isn't
huge, but you should use a stop at $29 to give it room to move.